The company collects ground rents from thousands of Huddersfield properties. It bought freeholds from Kirklees Council in 1994 and 1996.

The firm is accused of issuing large surcharges to customers who they claim have defaulted on ground rent payments.

The rents cost a few pounds on average and sometimes are just a few pence per year.

But some customers have faced surcharges of between £35 and £70 when payment does not arrive.

As well as focusing on the firm, the Government investigation is looking at Mr Sheerman's request for new guidelines on charging ground rent.

He wants to see a maximum charge - based on a percentage of annual ground rent - for late payments.

A new law, due to come into force this year, is expected to say that leaseholders must only pay ground rent if the landlord has sent a written demand in a defined format.

Mr Sheerman, who asked for the investigation last year, said: "Companies have been targeting vulnerable citizens and - whether or not reminder letters were sent - the size of fines compared with the rents is ludicrous.

"The Government has been kicking its heels over this issue and it is time it was sorted out."

Mr Sheerman's request for the investigation was prompted by a flood of complaints about the firm from Huddersfield residents.

Leaseholders living in Estates and Management Ltd properties told Mr Sheerman they had been sent administration charges for defaulting on ground rent payments.

However, some leaseholders said they had received no demand for ground rent, only a letter to say they were in arrears.

Others claimed they had paid their rent, but Estates and Management Ltd were denying it had been received.

Some customers also said the firm made it difficult for them to send payment.

Many complaints were made last June.

At the time, Estates and Management Ltd told the Examiner it had posted out ground rent demands but could not confirm whether they had reached leaseholders.

Today, an Estates and Management spokeswoman confirmed that the administration fee charged by the firm was £35.